Apple, Google, others settle antipoaching lawsuit for $415 million

Federal Judge Lucy Koh has approved a $415 million settlement by Apple, Google, Adobe and Intel related to agreements not to poach each other's employees.

Shara Tibken/CNET

Apple, Google, Intel, and Adobe will shell out $415 million to put to rest an antipoaching civil lawsuit that accused the companies of conspiring not to hire each other's employees.

On Wednesday, US District Judge Lucy Koh ruled that the settlement was "fair, adequate, and reasonable" for the thousands of plaintiffs involved in the class action suit. The $415 million settlement was proposed by the four tech companies in January after Koh had rejected a previous attempt to settle the case for $324.5 million on the grounds that the employees harmed by the antipoaching policy deserved more money. In March, Koh already appeared to be leaning toward approving the $415 million settlement.

Filed by former employees of the companies involved, the lawsuit shed a light on the practice of some major tech industry players of allegedly working together to agree not to poach employees from each other. The affected employees had argued that such agreements limited their ability to rise up in the industry and stifled their attempts to earn higher salaries. Email exchanges among such top executives as late Apple co-founder and CEO Steve Jobs and former Google CEO and now executive chairman of Alphabet Eric Schmidt revealed how requests were made not to hire certain employees away from each other.

"I would be very pleased if your recruiting department would stop doing this," Jobs wrote to Schmidt on March 7, 2007.

Schmidt then sent the request on, saying "I believe we have a policy of no recruiting from Apple and this is a direct inbound request. Can you get this stopped and let me know why this is happening? I will need to send a response back to Apple quickly so please let me know as soon as you can."

In the January motion to settle the case, the companies continued to deny that they had done anything wrong or violated any laws.

"We deny the allegations contained in the suit and we deny that we violated any laws or that we have any obligation to the plaintiff," Intel spokesman Chuck Mulloy said in an emailed statement at the time. "We elected to settle the matter in order to avoid the risk, burdens and uncertainty of ongoing litigation."

Apple, Google and Intel declined CNET's request for comment on the settlement. A spokesperson for Adobe sent CNET the following statement:

Adobe firmly believes that our recruiting policies have in no way diminished competition for talent in the marketplace. Adobe strongly denies that it violated any laws or engaged in any wrongdoing. Nevertheless, we elected to settle this matter in order to avoid the uncertainties, cost and distraction of litigation. We are pleased to have the matter resolved.

Attorneys representing the plaintiffs had requested around $81 million in fees. But Koh nixed that amount, saying it would be a "windfall" for the lawyers and instead awarded them $40 million.

Movie studios Lucasfilm and Pixar and financial software and services company Intuit were part of the original lawsuit filed in 2011, but those companies settled with the plaintiffs in 2014 by agreeing to pay out $20 million spread among the three of them.

The case started when a former Lucasfilm software engineer filed a lawsuit alleging that the seven companies involved conspired to keep salaries low by agreeing not to poach one another's employees. Other complaints followed and were eventually combined into a single class action lawsuit that covered almost 65,000 employees who worked for the seven companies between 2005 and 2010.

The suit itself followed a 2009 antitrust investigation into the companies by the US Department of Justice. That matter was settled the following year, with the companies ending their agreements not to employees of the other firms involved in an attempt to hire them.